Microsoft alters licences; some changes draw fire

Microsoft this week made major changes to its product licence policies, including one that allows customers to replace software preinstalled on a computer with versions of that software purchased through its volume licensing program without paying extra.

Microsoft this week made major changes to its product licence policies, including one that allows customers to replace software preinstalled on a computer with versions of that software purchased through its volume licensing programme without paying extra.

Microsoft has eased up on a policy under which it charged some of its business customers twice to run the Windows operating system on a corporate workstation, research firm Gartner said in a report this week. Microsoft will now allow its customers to replace the Windows XP operating system preinstalled on a PC with a different copy of Windows XP purchased through a volume licensing programme.

Some companies who buy PCs from manufacturers with Windows preinstalled on the machine erase that operating system and install a new copy that is consistent with other workstations inside that organisation. This practice, known as "reimaging," is common, says Gartner analyst Michael Silver, because it allows system administrators to ensure that each computer at a company is configured to run hardware and software in the same fashion.

Beginning with Windows XP Professional, Microsoft has altered the End User Licensing Agreement attached to manufacturer copies of the operating system to no longer prohibit reimaging. It affects customers who subscribe to one of three volume licenses: Open, Select and Enterprise.

Microsoft has said it altered its software licence for manufacturers to allow for reimaging based on customer feedback, according to a document on its website. The company says that the policy gives customers the ability to "create standard operating environment images... which can be deployed rapidly and efficiently."

Microsoft made some initial changes to its policies on reimaging in September of last year, according to that document. At the time, Microsoft gave some corporate customers the right to replace manufacturer-installed software with versions acquired through Select and Enterprise licences. However, customers who subscribed to Microsoft's Open licence, which includes companies with as few as five computers, were still prohibited from reimaging, Microsoft says.

"Microsoft backed off a bit, but we still got some rumbles from our clients with Open licences throughout the last year," Gartner's Silver says.

The latest changes now extend the policy to also include customers with an Open licence, Gartner says, but the research group warns there are still logistical issues that get in the way. They have to do with the new anti-piracy technology that Microsoft will widely use beginning with Windows XP, called Product Activation.

That technology "locks" each copy of Windows to the hardware of the PC on which it is installed and issues an activation code that Microsoft keeps on file. Microsoft can then identify when the software is installed on a different computer illegally if it finds multiple copies of a single activation code.

While Select and Enterprise customers are not required to activate software, Open customers are. "If Open customers don't have a way of getting around Product Activation, then they have the right to reimage but they don't have the software to do it," Silver says.

Microsoft switched its stance on reimaging the same day it made other sweeping changes to its enterprise licensing options that were announced in May. As of Monday, customers can no longer buy a single-version upgrade to Windows. Instead, they have to either buy full versions each time they want to upgrade, or sign on to a new licensing option called Software Assurance, which gives customers the right to run the most current versions of Windows for the length of a licence agreement, typically three years.

However, that new scheme has garnered some criticism. Some analysts, including Gartner, say the new option could increase the amount of money companies spend on Windows licenses by as much as 107%, for companies that upgrade every four years. That figure is according to research from the Stamford, Connecticut, research firm.

A survey released by Giga Information Group and SunBelt Software also suggests that the majority of Microsoft's customers aren't happy with the new Software Assurance option. Of more than 4500 Windows administrators polled, most said they did not like the new plan, according to Stu Sjouwerman, president SunBelt Software. The majority of those respondents also said they either could not afford the new licensing option or would hold off on making any switch.

Although the survey was not scientific -- it only polled system administrators who clicked on a link in a newsletter distributed by SunBelt -- it did offer a real look at how companies are responding to the changes, Sjouwerman says.

"The results are basically ugly," he says. "About 80% of the people that responded did not like it to some degree."

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